Risk Disclosure Statement

1. General Investment Risks

Market Risk

All investments are subject to market risk, including the potential for significant losses. Market conditions can change rapidly due to economic, political, or other factors beyond our control. Gold and precious metals markets can be particularly volatile, with prices subject to:

• Economic cycles and inflation/deflation trends
• Central bank monetary policies and interest rate changes
• Currency fluctuations and dollar strength variations
• Geopolitical events and market sentiment shifts
• Supply and demand imbalances in precious metals markets

Volatility Risk

Gold and precious metals investments can experience significant price volatility. Daily price movements of 3-5% are common, with larger movements possible during periods of market stress. This volatility can result in substantial gains or losses over short periods.

Liquidity Risk

While gold futures markets are generally liquid, extreme market conditions may result in reduced liquidity, wider bid-ask spreads, and difficulty executing trades at favorable prices. This could impact our ability to implement investment strategies effectively or liquidate positions when desired.

2. Strategy-Specific Risks

Concentration Risk

Our investment strategy focuses exclusively on gold and precious metals markets. This concentration creates heightened exposure to factors affecting these specific markets and eliminates the diversification benefits of broader asset allocation. Adverse developments in gold markets could result in significant portfolio losses.

Leverage Risk

Our strategy employs leverage through futures contracts and derivatives, which can magnify both gains and losses. Key leverage-related risks include:

• Amplified losses during adverse market movements
• Margin calls requiring additional capital or forced liquidation
• Interest rate exposure on leveraged positions
• Counterparty risk with leverage providers

Derivatives Risk

Our strategy utilizes various derivative instruments including futures and options. These instruments carry specific risks:

• Unlimited loss potential on certain positions
• Time decay affecting option values
• Basis risk between derivatives and underlying assets
• Complexity in pricing and risk assessment
• Potential for total loss of premium paid

Model Risk

Our investment decisions rely heavily on quantitative models and systematic processes. These models may fail to perform as expected due to changing market conditions, parameter drift, data errors, or unforeseen market dynamics. Model failure could result in significant losses and extended periods of underperformance.

3. Operational and Business Risks

Key Person Risk

Our investment strategy and performance depend significantly on the continued involvement of key personnel, particularly our Chief Investment Officer. The loss of key personnel could adversely affect our ability to implement investment strategies and maintain performance levels.

Technology Risk

Our operations rely heavily on technology systems for trading, risk management, and operations. Technology-related risks include:

• System failures disrupting trading operations
• Cyber attacks and data security breaches
• Software errors affecting trade execution
• Communication failures with counterparties
• Data corruption or loss affecting decision-making

Counterparty Risk

We face counterparty risk with various service providers including prime brokers, clearinghouses, and technology vendors. The failure of any significant counterparty could result in losses, operational disruptions, or inability to access client assets.

Regulatory Risk

Changes in laws, regulations, or regulatory interpretation could adversely affect our operations, investment strategies, or client relationships. Regulatory changes could require strategy modifications, increase compliance costs, or limit investment opportunities.

4. Performance and Fee Risks

Performance Risk

Past performance does not guarantee future results. Our historical performance may not be indicative of future performance due to:

• Changing market conditions and cycles
• Evolution of market structure and participants
• Regulatory changes affecting strategy implementation
• Increased competition and market efficiency
• Changes in volatility and correlation patterns

Drawdown Risk

Investment strategies can experience periods of significant losses or drawdowns. While our historical maximum drawdown has been -5.3%, future drawdowns could be larger and more prolonged. Extended drawdown periods could affect your financial situation and investment objectives.

Fee Impact

Our performance-based fee structure means that strong performance periods result in higher fees, which reduce net returns to clients. The high-water mark provision means that fees are only charged on new profits, but this does not eliminate the impact of fees on overall returns.

5. Specific Market Risks

Gold Market Dynamics

Gold markets are influenced by unique factors that can create significant price movements:

• Central bank buying and selling activities
• Mining production costs and supply disruptions
• Jewelry and industrial demand fluctuations
• Investment demand and ETF flows
• Currency devaluation and inflation hedging demand

Interest Rate Sensitivity

Gold prices are generally inversely correlated with real interest rates. Rising interest rates can negatively impact gold prices by increasing the opportunity cost of holding non-yielding assets and strengthening the US dollar.

Currency Risk

Gold is primarily priced in US dollars, creating currency exposure for non-USD investors. Dollar strength can negatively impact gold prices and returns for international clients, while dollar weakness can have the opposite effect.

6. Regulatory and Tax Considerations

Regulatory Environment

As a Vanuatu-based investment manager, we operate under Vanuatu financial services regulations. Clients should understand that regulatory protections may differ from their home jurisdiction and should consult with local advisors regarding applicable regulations and investor protections.

Tax Implications

Investment returns may be subject to various taxes depending on your jurisdiction of residence. Tax considerations include:

• Capital gains taxes on investment profits
• Income taxes on certain types of returns
• Withholding taxes on cross-border investments
• Reporting requirements for foreign investments
• Estate and inheritance tax implications

You should consult with qualified tax advisors regarding the tax implications of our investment strategy in your specific circumstances.

7. Suitability and Client Responsibilities

Investment Suitability

Our investment strategy may not be suitable for all investors. You should carefully consider whether our strategy is appropriate given:

• Your financial situation and liquidity needs
• Investment objectives and time horizon
• Risk tolerance and capacity for losses
• Experience with alternative investments
• Overall portfolio diversification

Client Due Diligence

You are responsible for conducting your own due diligence regarding our investment strategy, performance history, and risk profile. This includes reviewing all offering documents, conducting independent research, and consulting with qualified advisors before making investment decisions.

Ongoing Monitoring

You should regularly monitor your investment and assess whether it continues to meet your objectives and risk tolerance. Market conditions and personal circumstances can change, potentially affecting the suitability of our investment strategy.

8. Disclaimers and Limitations

No Guarantee of Performance

We make no representations or warranties regarding future performance, and no guarantee that investment objectives will be achieved. All investments involve risk of loss, including the potential for total loss of invested capital.

Forward-Looking Statements

Any forward-looking statements regarding expected returns, market conditions, or strategy performance are based on current expectations and assumptions that may prove incorrect. Actual results may differ materially from any forward-looking statements.

Information Sources

While we strive to use reliable information sources, we cannot guarantee the accuracy or completeness of all information used in our investment process. Information errors could affect investment decisions and performance.

9. Risk Management Limitations

While we employ comprehensive risk management procedures, these measures cannot eliminate all risks or guarantee against losses. Risk management limitations include:

• Models may not capture all risk factors or extreme scenarios
• Risk controls may fail during periods of market stress
• Correlations and volatilities can change rapidly
• Liquidity constraints may prevent timely risk reduction
• Operational errors could compromise risk management effectiveness

10. Contact Information

If you have questions about these risk disclosures or need additional information, please contact: